Medical Health Insurance 101
What you don't know will cost you
The word “budget” is creeping back into everyday American dialogue as the credit crisis has forced people to re-think debt, responsible savings and financial management. Now, add your health insurance to the list of expenses you need to watch. “When it comes to health insurance, people don’t budget for procedures,” says Brian Bourke of the Mississippi Valley Health Network. “When patients and their families don’t understand deductibles and coverage limits, it’s a surprise when they find out how much they are going to have to pay out-of-pocket when the medical bills hit their mailbox.”
Fortunately, there are ways to become a smart, savvy healthcare consumer, without compromising your or your family’s health. We asked both insurance experts and billing managers at our Mississippi Health Network offices to list the top five things patients should know about their health insurance coverage that can help save money.
1. Know your plan’s “covered benefits.”
Your health insurance policy is an agreement between you and your insurance company. The policy lists a package of medical benefits such as tests, medications and treatment services. The insurance company agrees to cover the cost of certain benefits listed in your policy. These are called “covered services.” Your policy also lists the kinds of services that are NOT covered by your insurance company. You will need to pay for any uncovered medical expenses that you receive. Insurance companies determine what tests, medications and services they will cover. These choices are based on their understanding of the kinds of medical care that most patients need. In some cases, your doctor might decide that you need medical care that is not covered by your insurance policy, which means you would be financially responsible.
Tip: When it comes to medications, every managed care plan also has a drug formulary. A formulary is a list of prescription medications that your health plan has approved. If a medication isn’t on the formulary, you’ll probably have to pay more for it. Your insurance company can give you a list of drugs that are covered. If necessary, show the list to your doctor when the doctor writes you a prescription.
2. Know if the procedure needs “preauthorization” or “precertification.”
If your doctor decides that you need to go to the hospital, have surgery or have certain tests, your insurance company may refuse to pay for it unless the service is preauthorized or precertified (approved prior to the service being performed). Your insurance ID card will often list the number to call or Web site to access to determine this. When in doubt, always contact your insurance company.
3. Know what costs you are financially responsible for.
Healthcare benefits are changing rapidly. Not only are patients paying more of the insurance premium dollar, patients are also becoming responsible for a larger portion of the healthcare bill. This is achieved through increasing the deductible, co-pays, and co-insurance amounts. These are often referred to as out-ofpocket expenses. Experts advise that you understand these outof- pocket costs ahead of time, so you can budget appropriately and are not surprised by a large bill.
4. Know how to interpret an EOB and your bill from the provider.
Insurance companies send patients an “Explanation of Benefits” (EOB) once they have processed the healthcare claim. The EOB will identify how the claim was processed, what benefits were applied, and the patient liability. This is NOT a bill. Once the insurance company sends your healthcare provider a check for the allowed amount, the provider will send you a bill or a patient statement to notify you of the amount you owe. Tip: The sections on the EOB and the patient statement that show the amount you owe should match. If not, call your insurance company and healthcare provider to find out why.
5. Know what to do if your claim is denied.
If your claim is denied, your EOB will list the reason it was denied. You may need to call your insurance company to further understand the reasoning. There are multiple reasons a claim can be denied such as a processing error, need for additional information, or it is a non-covered benefit. Once the reason is determined, you may need to work with both your insurance company and your healthcare provider to resolve the issue. If your insurance company denies your claim, you have the right to appeal (challenge) the decision. Before you decide to appeal, know your insurance company’s appeal process. This should be discussed in your plan handbook. Also, ask your doctor for his or her opinion. If your doctor thinks it’s right to make an appeal, he or she may be able to help you through the process.
Tip: Make sure you carry your insurance ID card and always respond to questionnaires from your insurance company – this could make the difference between them paying or not paying.
Know your care options. Ambulatory surgery centers cost less.
There are options for less expensive procedures and care that are covered by insurance. For example, many Quad City patients are choosing to have their elective or non-emergency procedures done at Davenport’s Mississippi Valley Surgery Center (MVSC) rather than the area hospitals. “Typically, our costs are much lower than a hospital, because our patients heal at home instead of in a hospital bed,” explains Alison Beardsley, MVSC manager. “We accept all major insurances because our insurance partners recognize that ambulatory surgery centers like the MVSC are managed efficiently with lower infection rates and excellent quality of care,” she adds.
As an example, based on Iowa Hospital Association data, charges at local Quad City hospitals for knee replacement surgeries range from $26,000 to $38,000. The average charge for knee replacement surgery at Mississippi Valley Surgery Center is $19,000, which is significantly lower than the hospitals. “Insurers are beginning to see the benefit of performing this procedure in the outpatient setting from both a quality and cost perspective,” adds Dr. John Dooley, MVSC administrator. “The cost of health care is on the forefront of everyone’s mind. This is just one example of how the MVSC and its network of partners are making quality healthcare more convenient and cost effective.”
